Thoughts on business, entrepreneurship, and life from a Silicon Valley entrepreneur and writer.

Friday, June 30, 2017

Silicon Valley in the Mirror (a Trump Silver Lining)

It's safe to say that Silicon Valley's reputation hasn't been having a good year. Uber has reached the point where the number of pages that claim to be "the definitive list of Uber scandals" runs off the first page of Google results, with widespread sexual harassment and discrimination resulting in the termination of over 20 employees and the resignation of co-founder and CEO Travis Kalanick.

(Full disclosure: I have previously pitched Justin Caldbeck during his days at Bain Capital. I've known and liked Dave McClure for many years. I never witnessed either of them behaving inappropriately towards women, and am relying on the published journalism rather than any personal knowledge.)

Many people feel rightly disgusted by these revelations, which make for an ugly contrast with Silicon Valley's self-image as a progressive industry, that is changing the world for the better. One of the things that has often irked me is the tendency by people in Silicon Valley to look down on other industries, such as Wall Street or Madison Avenue for being knuckle-dragging Neanderthals, confident in being oh so much more evolved.

But while the temptation might be to wait for these scandals to die down, and to go back to business as usual, these revelations are in fact a good thing for Silicon Valley. We are being forced to look in the mirror and confront issues, that, frankly, we've ignored for too long.

It was only two years ago that Kleiner Perkins defeated Ellen Pao's long-running sex discrimination lawsuit in a decidedly pyrrhic victory. Even though Kleiner technically won, the testimony included descriptions of numerous instances of sexual harrassment perpetrated by former Kleiner partners against female staff. Yet perhaps because Kleiner "won" the case, it didn't seem like much changed in Silicon Valley. Nobody at Kleiner lost their job, or were punished.

So what changed? Ironically, I think it's possible that we can thank Donald Trump for convincing women to step forward and testify.

During his campaign (and after his election), Trump repeatedly demonstrated his misogyny by denigrating women's appearance (Alicia Machado, Carly Fiorina, Heidi Cruz, and Mika Brzezinski were only the most famous recipients of this abuse; full disclosure, Heidi Cruz was an HBS classmate and friend), admitting to sexually harassing women ("grab 'em by the [vagina]"), and using insults and name-calling to attack his opponent, Hillary Clinton. By the way, I found this website, which claims to track all of Trump's offensive sexist comments; I suspect it's incomplete:http://www.telegraph.co.uk/women/politics/donald-trump-sexism-tracker-every-offensive-comment-in-one-place/

The result was the Women's March on Washington, the largest single-day protest in US history, and what seems like an increased resolution to call out sexism and sexual harassment. The behavior I outlined at Uber and on the part of certain venture capitalists date back years. Heck, it's not even "he said, she said," since in nearly all of these cases, there was written evidence of the bad behavior! We just simply ignored it until now!

One of the worries that people--including me--had about Trump's election is that it would normalize bad behavior. This may still occur, but it seems clear that it has also sensitized people to that same behavior. It's as if Trump were an infection that produced antibodies to the kind of sexism that comes so naturally and instinctively to him.

This is the opportunity before us. Thanks to the bravery of the various women who are coming forward, we can work to root out and punish this kind of bad behavior. In the case of Uber and the VCs, there have already been real consequences. Kalanick was forced to resign by his investors. Binary lost both its most recent $175 million fund, and the additional $75 million that it was scheduled to close, just days after the Information story came out. At a standard 2.5% management fee over 10 years, that's a $60 million loss even before considering the lost potential carried interest. McClure has turned the running of his firm, 500 Startups, over to new CEO Christine Tsai (his female co-founder) and is undergoing counseling.

His willingness to step forward and condemn this behavior in no uncertain terms seems to have encouraged other male VCs to step forward, and to encourage other people who have been harassed to speak out. By lowering the perceived risk of speaking out, we can help more people to come forward and tell their stories.

It is important to note that we have to avoid getting swept up in what Donald Trump would surely call a "witch hunt." This is not the time for vigilante justice, or accepting claims without evidence. There is no such need--as the Caldbeck story shows, there is plenty of evidence of wrongdoing, and there are immediate punishments available, such as LPs invoking morality clauses and pulling out their funds, and those who have been wronged seeking civil judgments.

There's an old saying about cockroaches; there's never only one. Sure enough, Caldbeck's story has already uncovered others, and I suspect that more are soon to come. One prominent investor estimated that around 5-10% of men are sociopathic enough to commit these kinds of acts...IF THEY THINK THEY'RE GOING TO GET AWAY WITH THEM. Think about it--people like Caldbeck sent explicit texts and emails. That's hard evidence. The only reason you would do such a thing is if you thought you would get away with it, regardless of the existence of a smoking gun.

Fortunately, this belief has been proved wrong. Unfortunately, this belief was apparently right for many years, and it is disgrace that it took so long, and the election of a harasser-in-chief in the White House to get us to actually hold these bad actors accountable.

We can't change the past. But we can change the future. Don't let these antibodies go to waste. Call out bad behavior when you see it. Make it safe for those with less power to present their evidence against powerful evildoers. In other words, make America great again.

13 comments:

Anonymous
said...

"You talk like a fag, and your shits all retarded."

If you gonna shill your garbage half baked pseudo-intellectual nonsense blog on the ycombinator aggregator consider posting something interesting, thought-provoking, or maybe actual news. You are what is killing silicon valley. You and all the rent seeking garbage who managed to attach like tics to every HR department and actively destroy companies from the inside like a malignant cancer.

Ellen Pao is a virus. Destroyed Reddit. There is a reason everyone on the site wanted her gone and she wanted to make that $$ before leaving so she claimed lawsuit like she did so many times. Is she so attractive that she has men hit on her everywhere she goes? Laughable. She looks like a Penguin with down syndrome. Kleiner won suit because she had no legitimate case. Absolutely nothing. Its too bad that looking at a woman for longer than 10 seconds is not grounds for sexual harassment, then maybe she would have had grounds. I mean if anyone can look at her for longer than 10 seconds without diverting their eyes from disgust and vomiting the contents of their stomach.

"Misogyny" is defined as a hatred of women. Criticism or even insulting a woman does not constitute misogyny. Claiming it is, is just as pathetic and retarded as its polar opposite. Here's something interesting look into who Alicia Machado and all the wonderful things shes done.

While you are doing that take your own advice and "Call out bad behavior when you see it." Or will that constitute misogyny, racism, x-phobia or whatever buzzword you can throw out?

Thanks for letting me vent where no one will read my post. Cant wait to go back to the daily grind in that brave new world sodomite worshipping hellhole you call Silicon Valley.

I imagine that the Anonymous comment above was intended to hurt my feelings. Sadly for the author, it didn't. He (or very unlikely she) probably wanted me to get angry and descend to the same level of name-calling. The reason I keep posting is because I'm trying to engage people in calm and reasoned dialog (which is made difficult when people post anonymously, rather than sharing their opinions freely as I try to do). But, for illustration purposes, let's parse the comment line by line:

> "You talk like a fag, and your shits all retarded."

I'm not sure that there is a particular way that homosexuals talk, so it's hard for me to judge on this one. I also think the intended word is "shit's"; I don't think excrement's intelligence can be measured. It's also fascinating how "retarded," a word that was originally intended as a more humane, less-loaded term than "idiot," "imbecile," or "moron" has itself been transformed into an insult. Of course, having an intellectual disability isn't a person's fault, though ignorance could be if it is deliberate and not the product of environment.

I believe that anyone who wishes to can post to HN; that is its purpose. In terms of half-baked, I will admit that I tend to write my posts in one sitting, and don't edit or revise, so in that sense my work is "half-baked," though I think it still gets the point across. I'm not sure what the difference is between "pseudo-intellectual" and "real intellectual" might be, so it's harder to respond. It is true that I am not a tenured professor or academic, though I have taught multiple classes at Stanford. Nor do I have a degree in gender studies or employment law. On the other hand, I suspect that the person who wrote the comment above has neither as well. Also, it's a pet peeve of mine that people refer to blog posts as "blogs." It's very imprecise; we don't call newspaper articles "newspapers" for example. Finally, while it's hard to objectively judge "interesting" and "thought-provoking," I thought it to be so; the only way for me to find out is to post it and gather feedback. As for actual news, many of the top articles on Hacker News are opinion pieces, analyses, or editorials. I don't think that my writing is very different, and many of my blog posts (note the term there) have also appeared on HN.

> You are what is killing silicon valley. You and all the rent seeking garbage who managed to attach like tics to every HR department and actively destroy companies from the inside like a malignant cancer.

The use of the term "rent-seeking" (note the comma, which ought to appear there) is interesting. The term is generally taken to mean obtaining money by manipulating social or economic conditions rather than creating real wealth. I'm not sure what rent the commenter is referring to; I'm not getting paid for my blog posts, nor do I benefit economically in other ways. I suppose you could theorize that taking a public stand would result in economic benefits from working with like-minded people who are attracted to my opinions, but this seems pretty unlikely.

I'm guessing the commenter's working theory is that those who support punishing sexual harassment are like "ticks" (again, not "tics" which is a totally different word) who attach to HR departments and "destroy companies from within." I don't believe there is good evidence to this effect. It strikes me that Uber was doing a pretty good job of destroying itself; these scandals may be the only thing that allows it to survive, by forcing changes in management practices to improve collaboration and the ability to recruit and retain talent. If I looked at Silicon Valley's most valuable companies--Apple, Alphabet, Facebook--they appear to be opponents of sexual harassment and misogyny, rather than supporters. While I am sure that bad things still occur within those organizations, and some of those perpetrators go unpunished, those companies generally show little tolerance for the kind of behavior I outlined in my post. I would be hard-pressed to describe them as "being destroyed from the inside."

> Ellen Pao is a virus. Destroyed Reddit. There is a reason everyone on the site wanted her gone and she wanted to make that $$ before leaving so she claimed lawsuit like she did so many times.

In terms of saying Ellen Pao destroyed Reddit, I have to assume that you are referring to the decision, which took place when she was CEO, to ban five subreddits for fostering off-site harassment. For those who aren't familiar, the subreddits banned were:

r/fatpeoplehater/hamplanethatredr/transfagsr/neofagr/shitniggerssay

It's important to note that Yishan Wong, the man who preceded Pao as CEO, has written that the bans were the work of the site's founders, and that Pao had argued against the ban (which Wong supported). However, Pao was the subject of much criticism and abuse regardless.

I am a big supporter of free speech (I once resigned from an advisory board because the CEO requested that I delete my blog post criticizing San Francisco because so many commenters had posted homophobic statements; I refused the request because I believe that we should engage with those with whom we disagree rather than suppressing them), and I have not carefully studied the banned subreddits, though their names alone are certainly repugnant to me. Nonetheless, Reddit is a private, for-profit company (something that a foe of rent-seeking ought to support) and it has a right to make a business decision. Free speech refers to the actions of the government; there is no obligation for a private party to publish your speech.

Finally, as far as I can tell, Ellen Pao has only participated on one lawsuit, for sexual discrimination against Kleiner Perkins. I am unaware of any other lawsuits, which would make the statement "she claimed lawsuit like she did so many times" factually inaccurate.

> Is she so attractive that she has men hit on her everywhere she goes? Laughable. She looks like a Penguin with down syndrome.

I am hard-pressed to understand why anyone would think that a woman's appearance has anything to do with the validity of her actions. This implicit assumption that a woman's worth derives from her appearance strikes me as one of the core elements of misogyny in the modern world.

> Kleiner won suit because she had no legitimate case. Absolutely nothing. Its too bad that looking at a woman for longer than 10 seconds is not grounds for sexual harassment, then maybe she would have had grounds. I mean if anyone can look at her for longer than 10 seconds without diverting their eyes from disgust and vomiting the contents of their stomach.

It's important to note that Pao sued for gender discrimination, not sexual harassment. The burden of proof was for her to demonstrate that Kleiner had failed to promote her because of her gender. In fact, former Kleiner senior partner Ray Lane admitted that the firm had mishandled at least one sexual harassment claim which led to the termination of former Kleiner partner Ajit Nazre after an internal investigation. Nowhere in my post did I argue that Kleiner was guilty of sexual discrimination; I was instead drawing attention to sexual harassment, which was not the subject of Pao's lawsuit.

> "Misogyny" is defined as a hatred of women. Criticism or even insulting a woman does not constitute misogyny. Claiming it is, is just as pathetic and retarded as its polar opposite. Here's something interesting look into who Alicia Machado and all the wonderful things shes done.

Actually, misogyny isn't just hatred; most definitions include contempt and discrimination against women in that category. Legitimate criticism of a women, or insulting a woman does not constitute misogyny. When I write that Hillary Clinton is a poor campaigner, and has repeatedly shown terrible judgment, that is not misogyny. However, if I were to depart from the facts and substance, and use derogatory language, it might represent misogyny.

As for Alicia Machado, I'll let folks review her Wikipedia page and decide for themselves:https://en.wikipedia.org/wiki/Alicia_Machado

From what I can tell, she has had a successful career.

> While you are doing that take your own advice and "Call out bad behavior when you see it." Or will that constitute misogyny, racism, x-phobia or whatever buzzword you can throw out?

I am unaware of bad behavior on the part of Alicia Machado, but if someone were to inform me and provide evidence, I would. I suspect that this commenter did not read my previous post in which I criticized the decision of Shakespeare in the Park to depict Julius Caesar as a clearly Trump-like figure. I didn't call for censorship, however, merely expressed my own opinion. There are also numerous examples where, I have called out bad behavior, the most famous of which is this one:

> Thanks for letting me vent where no one will read my post. Cant wait to go back to the daily grind in that brave new world sodomite worshipping hellhole you call Silicon Valley.

I believe in free speech and engagement, so to the commenter above, I simple say: "You're welcome." Of course I wish my blog had more readers, but building audience hasn't been a priority for me, so I'm afraid the comment above probably won't get that many views.

Finally, I think it is fascinating that the commenter implies that he (or, theoretically, she, though I find that highly unlikely) works in the technology industry in Silicon Valley. If I hated a place that much, I probably wouldn't work there. I write the kinds of posts and editorials I do because I love Silicon Valley, and want to make it better. I do agree that Silicon Valley is one of the parts of the world that is the most supportive and welcoming to homosexuals (as well as other members of the LGBTQ community) but I think this is a good thing. After all, Hacker News is operated by Y Combinator, which is led by Sam Altman, who is a smart, talented, hard-working homosexual.

(1) why are we in the Valley so keen to group together people in power when one of them acts egregiously but lambast when others group together people who are not advantaged when one of them acts heinously. Or in other words, how would you react if someone said "I never hire or associate with previously incarcerated individuals because I heard even non-violent offenders get hardened in jail and I read about one company where they hired an ex-con and he went on to steal from them?" You would, hopefully be rightfully indignant. But grouping together all male VCs because of the behaviors of a few rotten eggs is ok... where is our own introspection on this?

(2) why is everyone commenting on Lightspeed with respect to Katrina Lake, without also noting that Benchmark's partners invested in her thereafter, with no gender bias. There is a narrative going on that Caldbeck = Lightspeed = all VCs = all men in power =all men, which narrative falls over just two doors down at Sand Hill.

(3) great female VCs do exist today - look at Forerunner, Scale, 8roads, Canaan and you will see some of the best investors period who also, just happen by chance, to be female. I try to look on my co-investors from a gender blind standpoint - imposing a standard that I should now think about whether an investor is male or female rather than good or bad seems unfair to that co-investor not just to me.

And one last thing - while we all envision a world with only pure at heart entrepreneurs and purely capitalist heartless investors, the world is not so black and white. I think every male VC has had at least one female entrepreneur try to use an overly flirtatious overtone to try to get at least a meeting if not an investment. Which they are entitled to do, btw, just as any entrepreneur is entitled to use any means they can within the law to try to get a meeting. But the more you extrapolate the behaviors of one person like Caldbeck on the industry, the more you are going to find male VCs simply refusing to even take meetings with female entrepreneurs as a knee-jerk reaction to say "I want to do everything possible to avoid even the appearance of impropriety on my part in meetings." So you hurt female entrepreneurship rather than help it by grouping all male VCs as "bad guys."

(1) But grouping together all male VCs because of the behaviors of a few rotten eggs is ok... where is our own introspection on this?

> I definitely agree that all male VCs shouldn't be lumped together in this...nor do I think I did so. I also think that there is a strong danger that things could go too far; right now, there is clear evidence of wrongdoing for each case, and none of those accused has denied their actions. But I could easily see someone being falsely accused.

(2) why is everyone commenting on Lightspeed with respect to Katrina Lake, without also noting that Benchmark's partners invested in her thereafter, with no gender bias. There is a narrative going on that Caldbeck = Lightspeed = all VCs = all men in power =all men, which narrative falls over just two doors down at Sand Hill.

> I think the issue is that Lightspeed tried to cover things up. They correctly got rid of Caldbeck, but by insistent that Lake sign non-disparagement documents, they opened themselves up to (correct) accusations of a cover-up.

(3) great female VCs do exist today - look at Forerunner, Scale, 8roads, Canaan and you will see some of the best investors period who also, just happen by chance, to be female. I try to look on my co-investors from a gender blind standpoint - imposing a standard that I should now think about whether an investor is male or female rather than good or bad seems unfair to that co-investor not just to me.

> Totally agree. I hope people don't take to discriminating against male VCs because of the bad apples (which might be 5% of the population or so)

And one last thing - while we all envision a world with only pure at heart entrepreneurs and purely capitalist heartless investors, the world is not so black and white. I think every male VC has had at least one female entrepreneur try to use an overly flirtatious overtone to try to get at least a meeting if not an investment. Which they are entitled to do, btw, just as any entrepreneur is entitled to use any means they can within the law to try to get a meeting. But the more you extrapolate the behaviors of one person like Caldbeck on the industry, the more you are going to find male VCs simply refusing to even take meetings with female entrepreneurs as a knee-jerk reaction to say "I want to do everything possible to avoid even the appearance of impropriety on my part in meetings." So you hurt female entrepreneurship rather than help it by grouping all male VCs as "bad guys."

> I've certainly been subject to this myself...and I even have special EXTREMELY PROMINENT wedding rings that I wear to public events to try to head off attention. The good news is that the people who have been caught in this scandal have admitted their actions; so far, male VCs have not been falsely accused, though I am sure that this will happen at some point, at which point I will have to write an editorial defending the falsely accused!